change broker/dealer and funds if receiving 72(t)

L1: change broker/dealer and funds if receiving 72(t) A 55yr old client contacted me to look at her investments. She is taking $1500 a month for the last two years from her pension rollover to a IRA. Obvisouly she has to continue taking $18,000 a year out until 59 1/2 but she contacted me b/c she wants me to take over her portfolio but im not sure if i can transfer her to my broker/dealer and reallocate her investments. Based over our discussion she is entirely to aggressive for her comfort level. im not sure which method her old advisor used to calculate distrubtions, but if i knew that could I split the ira up and invest the portion that i move over to my brokerage. Not sure what my best options are. I just don”t what to cause any type of tax consequences for the client.
Thanks for any input2006-04-13 12:01, By: nick, IP: [205.135.136.10]

L2: change broker/dealer and funds if receiving 72(t)Hello Nick:
Your prospective client can transfer her existing IRA to an new IRA under your management & direction. This is best accomplished by performing a trustee-to-trustee transfer. After that, how the corpus of the IRA is invested is between you and your client.
TheBadger
wjstecker@wispertel.net

2006-04-13 16:15, By: TheBadger, IP: [66.109.211.254]

L2: change broker/dealer and funds if receiving 72(t)Hi Nick:
From a planner perspective, you need the answer to the question you posed before you even consider moving accounts around. Your question …
“im not sure which method her old advisor used to calculate distrubtions”
Until you have an absolute answer to the above question, you are walking into a big “mine field.” Rarely do we find an exact amount, like $1,500 per month in your case. My guess is when you dig deeper you may find this plan is already “busted” and that”s trouble.
Jim2006-04-14 09:26, By: Jim, IP: [70.184.1.35]

L2: change broker/dealer and funds if receiving 72(t)> Rarely do we find an exact amount, like $1,500 per month in your case.
Perhaps rare but not unreasonable or unusual. In my case I backed off slightly from the 120% maximum computed value just to get a nice round dollar amount. 2006-04-14 09:41, By: John, IP: [71.208.226.246]

L2: change broker/dealer and funds if receiving 72(t)Yes, you can work the numbers to get an exact amount. But when I see this situation it raises a “red flag” that I want to do some more investigating of the calculations to be sure there isn”t a “bust” from the beginning.
Jim2006-04-14 09:50, By: Jim, IP: [70.184.1.35]

L2: change broker/dealer and funds if receiving 72(t)Thanks for input everyone.
If this was ya”lls ( yes im from the south) case what would your process be to make sure that i don”t mess up.
What questions would you ask the client or have the client ask old advisor?
Thanks,
Nick2006-04-14 09:54, By: Nick, IP: [205.135.136.10]

L2: change broker/dealer and funds if receiving 72(t)Nick:
Roll Tide!
Back to my earlier post; get the documents used to calculate the SEPP Distribution amount. They should contain all of the assumptions used in the calculations. Until the prospective client can produce the documentation used in the original set up,this prospective client would remain just that; a prospect.
I hate to seem hard-nosed but if some other rep has created a mess, you don”t need to inherit it. Now you can help this prospect by offering guidance to figure out if the SEPP Plan is good or not, but unless you are a CPA or Tax Attorney, I don”t suggest that you get into doing calculations. Guidance would be to a qualified 72(t) expert … like TheBadger … or someone you know in your area that you are confident they know what they are doing. If you can help the prospect solve this problem, then you will have a good, new client.
Jim2006-04-14 10:20, By: Jim, IP: [70.184.1.35]

L2: change broker/dealer and funds if receiving 72(t)Thanks Jim,
I guess at this point i will have her get the documents from her old advisor on how they came up with the $ amount and then go from there.
Go Dawgs!!! ( the ones w/o a winning football program) But we have baseball!
So i guess that makes me your neigbor, if you still reside in Bama. If so what part?
Thanks again to all who inputed.
2006-04-14 10:38, By: Nick, IP: [205.135.136.10]